Friday, January 31, 2014

Nokia wins fourth German patent lawsuit against HTC (third in only two months)

Today the Mannheim Regional Court announced its ruling on a German Nokia lawsuit against HTC over
EP1579613 on a "method and apparatus for enabling a mobile station to adapt its revision level based on network protocol revision level". The court, which has adjudged more wireless patent infringement claims than any other forum in the world, found HTC to infringe this Nokia patent, held it liable for damages (the amount of which would have to be determined in a separate proceeding), and ordered an injunction (a remedy at law for patent infringement in Germany). The patents is somewhat standards-related (it plays a role in backward compatibility between new devices and networks running older technologies), but not standard-essential. HTC already has a license to Nokia's standard-essential patents (SEPs), but still needs one to Nokia's non-SEPs.

This is the fourth German patent injunction Nokia has obtained against HTC to date (and various cases are still pending, particularly before the Dusseldorf Regional Court). Nokia previously won a different case in Mannheim (in March 2013) and two Munich cases (both in December 2013; 1, 2).

I don't know which one of various "You Win Again" songs the IP professionals at Nokia listen to when they learn about another patent victory, nor can I offer a prediction as to when HTC will give up trying its luck with workarounds and take a royalty-bearing license, but I do have the Finnish company's official statement on today's decision:

"Nokia is pleased that the Regional Court in Mannheim, Germany has today ruled that HTC products infringe Nokia's patent EP 1 579 613 B1, which enables modern mobile devices to work in older networks.

This judgment enables Nokia to enforce an injunction against the import and sale of all infringing HTC products in Germany, as well as to obtain damages for past infringement. This is the fourth patent found infringed with injunction awarded in Germany.

Nokia began its actions against HTC in 2012, with the aim of ending HTC's unauthorised use of Nokia's proprietary innovations and has asserted more than 50 patents against HTC. Since then, Nokia believes it has demonstrated beyond doubt the extent to which HTC has been free riding on Nokia technologies, with HTC found to infringe several Nokia patents in venues including the Regional Courts in Mannheim and Munich, Germany, the UK High Court, the Tokyo District Court in Japan and the US International Trade Commission."

Nokia is primarily targeting HTC's Android-based devices. Some hardware patents are asserted against all HTC devices regardless of platform, but the focus is on Android. After this week's announcement of Google's sale of its Motorola Mobility hardware business to Lenovo, different commentators have expressed opinions on whether Google's purchase of Motorola's patents contributed to patent peace. I've been on the skeptical side, from the day in the summer of 2011 that the deal was announced. There appears to be some spin-doctoring going on that misleads reporters who don't follow these major global disputes in every detail. For example, a news agency article published today states that "[n]o new lawsuits have been filed by competitors against makers of Android phones since Google's purchase of Motorola Mobility". I could give a whole list of examples that prove the opposite, and additional reasons for why this, even if it were true (in reality, it's totally false), would fail to prove that the Motorola deal had much of an effect, if any, while there are strong indications that it was the opposite of a game changer.

I may elaborate on this with further facts on Monday (after this eventful week I've postponed my plans for an extended break). The lawsuit Nokia won today in Mannheim is one example that is sufficient, all by itself, to disprove the claim. This lawsuit was filed in April 2013, i.e., 11 months after the formal closing of the Motorola Mobility deal, by Nokia, undoubtedly a competitor. Whoever propagates (it doesn't matter whether or not this is done by Google or on Google's behalf or -- which would be most embarrassing -- by incompetent "analysts" and "pundits") that no competitor dared file lawsuits against Android-based devices after the Google-Motorola deal is already proven wrong.

Again, I can give various other examples of such lawsuits that were filed after Google acquired Motorola's patents, even if one bases this on the formal closing of the deal and not on the date of the August 2011 merger agreement. Many of those lawsuits were filed by Nokia. It filed its first round of lawsuits against HTC (and, in parallel, ViewSonic, a lower-priority target) in late April and early May 2012, at a time when the Motorola deal had been cleared everywhere except in China. The first Nokia v. HTC filings were made in the U.S. and Germany. Nokia kept filing more lawsuits in those jurisdictions (for example, a federal lawsuit in Southern California and a second ITC complaint, both in May 2013, i.e., about a year after the formal closing of Google's Motorola deal) and brought assertions in five other jurisdictions. Yes, in five of the seven countries in which Nokia is suing HTC over its Android-based devices, the first filings occurred well after the formal closing of the Google-Motorola deal.

[Update] HTC informed its shareholders as follows: "HTC will continue with the invalidity action pending before the German Federal Patents Court and immediately appeal the decision. The functionality found to be infringed is redundant and no longer in use in Germany and we are investigating modifications for our handsets to remove this redundant technology. This ensures that there will be minimal disruption to our customers while we pursue an appeal." [/Update]

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About Me

Florian Mueller is a former award-winning intellectual property activist with 25 years of software industry expertise spanning across different market segments (games, education, productivity and infrastructure software), diverse business models and a variety of technical and commercial areas of responsibility. In recent years, Florian advised a diversity of clients on the patent wars surrounding mobile devices, and on their economic and technical implications. (In order to avoid conflicts of interest, Florian does not hold or initiate transactions in any technology stocks or derivatives thereof.) He is now developing a game app for smartphones and tablet computers.